Fever Pitch – Advice on how to make your biotech business attract more investors than you need

Sue Rees in conversation with Tony de Fougerolles

The global pandemic has thrown up challenges for businesses worldwide, and some sectors reported difficulties in attracting the right (or any) investment or talent throughout 2020 and into 2021. However, one privately-held, Oxford-based biotech company has continued to go from strength to strength during one of the most challenging times for business.

Evox Therapeutics is focused on harnessing and engineering the natural delivery capabilities of membrane-bound extracellular vesicles, known as exosomes, to develop an entirely new class of therapeutics. Exosome-based drugs have the exciting potential to address some of the limitations of protein, antibody and nucleic acid-based therapies by enabling delivery to cells and tissues that are currently out of reach using other drug delivery technologies.

Evox is leading the development in this cutting-edge field and has continued its rapid growth trajectory despite COVID-19 under the leadership of CEO Antonin (known as Tony) de Fougerolles. With a PhD in Immunology from Harvard, before starting Evox Tony held a number of chief scientific officer roles. Most notably, he was the founding CSO at Moderna pioneering modified mRNA as a new therapeutic and vaccine modality and is an inventor of the mRNA chemistry and LNP delivery technology that forms the basis of both approved COVID-19 mRNA vaccines. Now proving to be skilled in business and science, under his leadership Evox announced the successful completion of a huge Series C funding round in February 2021, so I was very keen to find out some of the reasons behind his company’s outstanding performance.

Sue Rees: Tony, first of all, congratulations on the funding round. Can you tell me more about that and about what the impact of COVID-19 has been for your business? After all, this success came right in the middle of the pandemic!

Tony de Fougerolles: Thank you, Sue. Yes, we were pleased to announce that we completed a £69.2 million Series C funding round in February 2021. It was great to have a high demand from existing and new investors. We were almost three times oversubscribed, which is a fortunate position to be in. We’re now fully funded for the next three years.

So for us, the impact of COVID has been mainly operational. Throughout the pandemic, we’ve increased the size of the business almost threefold, going from 50 people in early 2020 to now over 130 and rising. So our immediate challenge was around working practices. Not only regarding the increased social distancing and similar measures we had to put in place and changes to the way the lab operates, but also contingency planning if we had an outbreak in the company and how to manage the need for people to isolate for ten days.

Because of all that, some of those new people we’d brought on board hadn’t been able to meet everyone face-to-face until recently. So those were our biggest concerns.

SR: There are challenges in growing at this kind of speed in normal times, but how were you managing it given those operational constraints?

AdF: You’re right. Getting new people embedded in the team and keeping everyone motivated is always vital, and it was certainly different over the past two years. Like many, I guess, we have held plenty of Teams meetings and similar to try and keep people connected and collaborating. And while we had people coming into the office at different times and on different days, I tried to be there about 80% of the time. That wasn’t about being in the lab – I’m not in there very much these days – but it was about being a visible presence and the ability to provide some face-to-face feedback and engagement with people when they were in.

SR: Why do you think your recent funding round was so oversubscribed? What is it about Evox that is attractive to investors?

AdF: Obviously, investors are looking to make money, and they need to see the potential for a return. But with Evox, it was also about buying into our bigger picture. They understood that we are trying to make a whole new class of therapeutics. That’s quite a different proposition from a more traditional pharma investment based around a new drug or treatment. Our position is much longer-term and involves building out a complete platform and pipeline. We’ve made a lot of advances and had a lot of early success, and I think this, coupled with our future vision, really resonated.

We’re also ambitious, aiming to build what we hope will become a substantial world biotech business based here in the UK, and that’s a rare opportunity to get involved with at the early stages.

SR: And what do you think were the key contributions you made to that success as CEO?

AdF: I think the CEO’s primary roles in any fundraising – no matter what stage – are to help organise the overall process and, crucially, identify appropriate investors and communicate to them the purpose and vision of what is on offer.

In practical terms, this involves helping populate a data room and drafting a business plan outlining what’s proposed as part of the fundraiser. Then, of course, there are a lot of introductory discussions about the company followed by a set of more in-depth follow-up meetings. An ability to communicate clearly and confidently is pretty key here.

In later stages, you get involved in due diligence, negotiations around terms, and forming a syndicate of investors that is optimal for the company, your existing investors, and the incoming investors.

It’s tough to do this alone, though. Make sure you have a great team of people around you who can help with everything from preparing the documents for your data room to being able to confidently answer due diligence questions and even get involved in negotiating the final documents if required.

SR: So, if you were to advise a company looking to attract further investment, what would your key messages be?

AdF: I think you need to start by having a clear story that you can tell with a simple concept. Without that, you’re going to find it challenging to capture the imagination of any investor. Then, once you’ve got your story, it’s all about building the strongest team you can. The people you have in your business and their capabilities are crucial for attracting significant investment. Your science itself actually comes last in the package of things to put in front of investors because without the first two you’re not going to get in front of many people, in my opinion.

This strategy was key to us being oversubscribed threefold and raising exactly what we wanted, from whom we wanted, even in the midst of a global pandemic. Our goal now is to continue to build a great “investment team”. It’s the same principle we have with our workforce – if you have high calibre people on board, that attracts more high calibre people who want to join you.

SR: What’s been the biggest challenge in putting together that investment-ready package?

AdF: Recruiting, without a doubt – certainly at the more senior levels. Not only is it a very competitive career marketplace at the moment, but finding the right cultural fit is so important. However, so far, we seem to have navigated that well. Having a high-quality team already in place and working well together makes attracting and retaining good talent a little easier.

We have great people, great science, and high-calibre backers. So, I’m pretty happy with how things are going right now!